Katherine Fowler paints a mural on the side of a building that's home to Linden's welcome center and the Chamber of Commerce. / BILLY KINGSLEY / THE TENNESSEAN

Written by

Bonna Johnson

THE TENNESSEAN

Heather Barber, a hospitality worker at the Commodore Hotel Linden, prepares a room for guests. Barber is one of three employees at the hotel whose position is funded by federal stimulus dollars.

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LINDEN, Tenn.  After six months of unemployment, the former nurse and single mother of three is happy paying her rent again, buying school clothes and the occasional coloring book for her children.

"I'm still underwater, but the breathing gets easier every day," said Sheilla Ward, while on break at the Commodore Hotel Linden, where she recently got a job paid by federal stimulus money cooking at the cafe. She still can't afford to get her car back or install a phone line at home  essentials she lost while out of work  but she hopes to bounce back over time.

"I couldn't pay my bills or keep gas in the car," said Ward, 40. "I lost the car and then fell into that hole you just can't get out of. I got behind on everything."

Depression-era unemployment rates have dogged this sleepy Tennessee town on the banks of the Buffalo River, where factories have either shut down or scaled back, and more than one in five in the work force are unemployed.

But as millions of dollars in federal stimulus funds flow to hard-hit Perry County, some residents are finally finding jobs and, more significantly, regaining hope.

The centerpiece of an innovative job-creation program has put 300 residents to work temporarily, including 200 like Ward who are employed in the private sector, working at the local country club, insurance offices, hardware stores, trucking firms and the Subway sandwich shop.

What sets this program apart from other stimulus-related ones around the nation is that workers' wages and benefits are paid directly by federal funds. It is the only stimulus initiative in the country like this, at least on this scale, according to federal Health and Human Services officials. The subsidized wages run through Sept. 30, 2010.

"People are happier that they get to work," said Ward, who is one of 10 subsidized workers at the 12-room inn in tiny downtown Linden.

"There's a new sense of pride. When it runs out, we'll have to deal with it, but, right now, it's making a huge difference in a lot of people's lives."

Nearly 600 unemployed residents qualified for the experimental program's 300 jobs. An additional 50 jobs will become available soon.

Many of the workers and business owners aren't crazy about the idea of taking government assistance, but they believe the boost could be just the thing to turn their community around amid a deep recession.

"We felt hopeless and lost," said Reneι Schmidt, owner of Dimples, a gift and toy shop that also includes a sandwich counter. "But now, people have a reason to get up the next day."

After single-handedly running her downtown store for nearly eight years, she now has three full-time employees, something she's never been able to afford.

"In some ways, I feel special that they could see there was hope for our community," she said.

She's expanding like never before, adding a lunchtime delivery service and a party planning sideline. Motioning to the long wall facing her sandwich counter, Schmidt excitedly talked of someday knocking it down to expand into the vacant space next door, perhaps locating a performance arts center there.

"It's a dream, but not an impossible dream," she said.

Will rising hopes last?

Down the street, Bill Tiller tilted back in a ladder-back chair and glanced out his storefront window, saying he detects a bit more hustle and bustle in the town where his family's furniture store has anchored one corner of downtown for 60 years.

"I've done a little more business. People are willing to spend a little bit more," the 76-year-old owner of Tiller Furniture and Appliances says.

He hasn't seen a need to hire free labor through the stimulus program, but credits it for putting many in this town of about 1,000 souls back to work. After unemployment topped out at 27 percent in January, it has since dropped to 22.1 percent in June for Perry County as a whole  still the highest in Tennessee.

At the same time, Tiller has misgivings that the current rising hopes could be deflated when the stimulus money goes away. "Unless something changes, it's going to be rough again," he said.

Perry County Mayor John Carroll also worries that the stimulus may end up being nothing more than a Band-Aid.

"We know there's a definite time when the government support will end," Carroll said.

The county can't rely solely on a temporary job-creation program for its long-term survival, the mayor said, but also needs new companies locating here. He optimistically talks of luring manufacturers of solar panels and green insulation materials, as well as call centers. Carroll also acknowledges that the narrow, two-lane access from Interstate 40 into the area continues to be a handicap for economic development.

Elsewhere in town, Heather Barber said that even if her stimulus job doesn't last, it's at least tiding her over and helping her to save money so she can go to school to become a health teacher.

She was laid off at Bates, a nearby auto parts factory, last December and spent several months looking for work. "I was going to move to Nashville where the jobs are," said Barber, 19. But then she landed a housekeeping job at the Commodore Hotel Linden.

The inn had been vacant for 15 years before new owner Michael Dumont, a Rhode Island transplant and real estate developer, reopened it two years ago.

The hotel's front door had usually stayed bolted, and the restaurant was open only on Friday and Saturday evenings. Now, with a full staff, the restaurant is open every day except Monday, and the lobby is unlocked and busier. Occupancy at the inn has risen from about 20 percent to 75 percent.

"Without something this drastic, businesses would be in ever graver situations," Dumont said of the jobs program.

He knows there will be some who knock the idea of business owners getting what amounts to free labor, but he thinks it's a far better use of stimulus money than a government-funded training program that may not guarantee employment at the end of classes.

"Rather than people in a classroom talking about the hospitality industry, they're actually working with customers," Dumont said.

Solutions for hard times

Tennessee economist Bill Fox acknowledges there are differing opinions about how federal dollars should be spent, and about the value of the free market. But, he said, special times require special solutions.

"While I wouldn't support this kind of program in the long term, I do view things differently in the stimulus era," said Fox, a professor of economics and director of the Center for Business and Economic Research at the University of Tennessee.

Generally, Fox doesn't think subsidized employment is a good idea. Employers may be tempted to lay off existing employees in order to hire subsidized ones. "You're replacing private money with public money, but not getting more work out of it," Fox said.

In Perry County's case, though, businesses with recent layoffs aren't permitted to hire stimulus workers for that very reason, said Donna Luna, the job program project manager in the county.

Over the course of seven job fairs, 69 businesses in Perry and nearby Lewis, Decatur and Wayne counties hired Perry County residents who qualified for the program.

One of the businesses, a day camp in Williamson County, also was permitted to hire workers but it must provide transportation reimbursement to them because the jobs are so far away, Luna said.

"Our intention is that they will put them on their own payroll after the program ends, but we can't require them to do something like that," she added. And, even if they don't continue in these jobs, the workers will have acquired new skills, she said.

To qualify, participants must be residents of Perry County and poor enough to qualify for food stamps. Household income must fall below 133 percent of poverty, which is about $2,444 a month for a family of four here. Participants also cannot have more than $2,000 in the bank or in cash on hand.

Tennessee is eligible for some $95 million in federal stimulus funds for subsidized employment and other programs, said Kenneth Wolfe, a spokesman for the U.S. Department of Health and Human Services' Administration for Children and Families.

Other counties want in

In Scott County, people wonder if they'll be able to get a piece of the stimulus pie that's similar to Perry County's, said County Mayor Rick Keeton. Unemployment in Scott County in the upper Cumberland Plateau was nearly 20 percent in June, fourth highest in Tennessee.

"We would certainly welcome an opportunity by the state to provide stimulus funding to our local manufacturers to allow them to put employees back to work," Keeton said.

The local sheriff's department and court system got stimulus funding, as did a summer jobs program for youth, Keeton said. There have been a few road-paving projects, but that's not creating local jobs, he said.

"We appreciate the roads getting paved, but the company coming in is three counties away and won't hire many people locally," Keeton said. "When the project is finished in a week or two, they'll move on to another area, and there's no long-term impact on the county."

Keeton's wish for jobs could become reality.

Gov. Phil Bredesen has called the program in Perry County a model that could be used in other places, although no decision has been made, said Lydia Lenker, the governor's spokeswoman.

Meanwhile, there's some grumbling in Perry County.

A few business owners don't want to participate, saying the program discriminates against workers who aren't poor enough to qualify, said Schmidt, the Dimples store owner. Others are just too proud to take the help, she said.

"Some people don't want to get their hopes up because they're afraid they'll be let down," added Dimples employee Robert Gobelet, 26.

Schmidt was there when Bredesen himself traveled to Linden back in May to announce the job-creation program. She thought about the pros and cons for a few weeks before deciding to take part.

"I had to pray about it," Schmidt said.

"I had to fight the thought of taking a handout, but I realize it's more of a hand-up."